Housing market continues firing

Research group BIS Shrapnel have predicted continued growth in the Sydney and Melbourne property markets over the next twelve months. However, this growth is expected to fall back in mid-2000, as economic growth begins to slow, and the property market enters the down side to the housing cycle.

BIS Shrapnel expects the average housing price in Sydney to increase by 12 per cent, and by 8 per cent in Melbourne over the next twelve months.

But perhaps the most interesting part of BIS Shrapnel report is the prediction of a slowdown in housing caused by housing interest rates of 9 per cent. With the RBA currently on a holding bias, we would be surprised to see rates pushed up by 250 points over the next twelve months.